Scandals and Stock Slides Hit US Growth Prospects, IMF Warns

07 August 2002

Seemingly endless tales of corporate malpractice as well as recent stock market mayhem have convinced the International Monetary Fund that US economic growth in 2002 will be lower than the previously anticipated 2.5%.

Such troubles, warns the IMF, may have a negative impact on consumer and business spending, presaging “the likelihood [that] downward revisions to the growth projections would be made” in its report next month.

The fund also blasted America for issuing “optimistic” forecasts – an accusation in no way quashed by Treasury Secretary Paul O’Neill’s prediction of 3%–3.5% expansion this year.

But there is a silver lining: even though “the downside risks have intensified”, the US outlook remains “broadly favourable,” the report added.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff